āNVIDIA is the Mag7 Stock with the bleakest future
NVIDIA is the best company in the trade, and thatās exactly the problem.
The short term bull case is real ā CUDA moat, first-mover on AI infra, margins nobody else touches, because no one else makes the GPUs as good. But the stockās pricing infinite growth, and forever capex spending, not a great company.
Every hyperscaler buying Nvidiaās chips is also building their own silicon. Your biggest customers are going to be your future competitors, and theyāre incentivized to stop overpaying you.
Concentration risk is real too ā a handful of hyperscalers drive the majority of revenue. Thatās not a customer base, thatās a few CFOsā capex decisions.
And the thesis assumes AI spend compounds forever. Spend cycles like this overbuild, then digest. Doesnāt mean itās over ā means the multiple isnāt pricing a pause, and any pause gets violent. And by that point, the huperscalers will have their own chips and NVIDIAās margins will no longer be viable.
